The latter mentions past experiences where temporary increases in personal income tax rates were introduced exceptionally as in Germany in 1991 with the introduction of the solidarity tax after reunification. Australia (2011) and Japan (2013) are also cited.
For the Fund, such a temporary tax would reduce social inequalities that the economic and health crisis of last year exacerbated. It would also reassure those most affected.
In addition, it would appear that the fight against the Covid-19 pandemic is indeed a collective enterprise within societies. In short, for Vitor Gaspar, a symbolic increase in taxes for those who have prospered over the past year would strengthen social cohesion. Governments should consider such a policy.
It would strengthen the perception of their citizens “That everyone contribute to the necessary effort to recover from Covid-19”, he told the Financial Times. In addition, the additional tax revenue would allow “To accumulate the resources necessary to improve access to basic services, to strengthen social safety nets and to revitalize efforts to achieve the objectives of sustainable development”, wrote the IMF in its report.
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